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Tata Power-ICICI Bank JV acquires Manoj Gaur's Prayagraj power project

IBEF:  December 05, 2019

Real estate industrialist Manoj Gaur's biggest power plant at Prayagraj in Uttar Pradesh was acquired by a joint venture of Tata Power and ICICI Bank. The venture agreed on taking over Rs 6,000 crore (US$ 858.4 million) of debt of the company. 

According to Tata Power, Renascent Power Ventures Pvt Ltd, the wholly owned subsidiary of Resurgent Power Ventures Pte, acquired 75 per cent stake in Prayagraj Power Generation Co Ltd (PPGCL) which owns and operates 1,980 MW coal-based electricity generation unit.

Resurgent Power is a joint venture of ICICI Bank and Tata Power, while PPGCL is a subsidiary of Gaur's Jaiprakash Power Ventures Ltd.

The company had sold its power projects of about 3,800 MW capacity in the last few years to settle debt of close to Rs 21,000 crore (US$ 3 billion).

Though Gaur put an equity of worth Rs 3,000 crore (US$ 429.2 million) but will not get any money from the sale. Earlier,the group sold two hydroelectric projects -- 300 MW Baspa Stage-II and 1,091 MW Karcham Wangtoo in Himachal Pradesh to Sajjan Jindal-controlled JSW Energy Ltd for Rs 9,700 crore (US$ 1.39 billion) in cash.

Now, Jaiprakash Power Ventures has been left with three more power plants with 2,200 MW electricity generation capacity after these three sales.

The total debt of PPGCL was Rs 11,000 crore (US$ 1.57 billion) and Renascent has agreed to takeover Rs 6,000 crore (US$ 858.4 million).

"Renascent Power Ventures Pvt Ltd (Renascent) has today acquired 75.01 per cent equity stake and 27,00,00,000 preference shares of Rs 10 each of Prayagraj Power Generation Co Ltd," Tata Power said in the regulatory filing.

Jaiprakash Associates Ltd and banks hold the remaining 25 per cent interest in the project. 

Resurgent Power is a joint venture based out of Singapore, in which Tata Power holds 26 per cent stake, through its wholly-owned Singapore-based subsidiary Tata Power International Pte.

The rest 74 per cent stake in Resurgent is held by ICICI Bank, Power Platform Ltd and Kuwait Investment Authority.

The coal-fired power plant presently operates at 62 per cent of capacity or plant load factor (PLF). It was won by Jaypee Group through competitive bidding, quoting a tariff of Rs 3.06 per unit.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.